A lesson from corporate bond space while 30-year US Trys rate is hitting the 4-year high

The US 30-year Trys rate touching 3.41% means printing a 4-yr high or a new high for the cycle. Lesson – historically if rates go up volatility goes up as well, thus creating a messy outlook for stocks, bonds and other asset clasees. But we still miss a significant move in bond markets despite recent correction in stocks or risk-on moves that followed after.

30-year T-Bond chart

Source: YCharts

As bond markets have not reacted yet it is worth to watch the corporate debt as the BBB segment was the fastest growing one over the last few years. An event that can present itself anytime can trigger massive re-ratings in the whole BBB space what consequently will push institutional investors, funds, insurance companies…etc. to offload tons of papers downgraded to junk status simply as they can not hold junk stuff on their books from risk perspective.

Is the General Electric downgrade to the space above the junk territory a trigger?